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Attacks on pipelines bring Iraqi oil exports to a halt

BAGHDAD, Iraq—After at least two days of insurgent attacks on oil pipelines in southern Iraq, the nation's crude oil export was effectively halted Wednesday. In northern Iraq, gunmen killed the chief of security at the state-run Northern Oil Co.

During the course of attacks Monday, Tuesday and reportedly Wednesday, the country's oil output went from more than 2 million barrels daily to a virtual standstill, an Iraqi oil official said.

In other violence in Iraq on Wednesday, the U.S. military reported that two soldiers died and 26 people were wounded, including two civilian contractors, in an afternoon rocket attack on a 13th Corps Support base in Balad, north of Baghdad. An Army spokesman said not all of those hit were from 13th Corps, but he couldn't identify which units the others were from until families had been notified.

The attacks are part of a wave of violence—including car bombings, shootings and assassinations of government officials—apparently designed to undermine the new Iraqi government that's set to take power after June 30. With oil as Iraq's only real economic engine, stopping the flow for any amount of time would cripple the country's already beleaguered financial outlook.

Iraq has the world's second largest oil reserves, and it's been struggling to restore production since the U.S. invasion last year.

On Tuesday a domestic oil line was blown up in Dibis, a farm town just west of Kirkuk, in the north.

A massive explosion last month halted flows through the Kirkuk-Ceyhan pipeline, the principal export route from northern Iraq. The terminus is the Turkish port of Ceyhan on the Mediterranean Sea.

The Kirkuk-Ceyhan pipeline is said to have pumped at only one-fourth capacity since the war. Most of the oil from northern Iraq is being trucked into Turkey through the Habur Gate border crossing.

With pipelines in the north already crippled routinely by sabotage, the attacks in southern Iraq effectively destroyed the country's ability to export high volumes of oil, according to an Iraqi oil official.

"After the attacks of the last two days, the export from the south has been stopped," said Ibrahim Bahr al Uloum, a former oil minister whose term ended earlier this month and who remains closely involved in the industry.

"As we approach the turnover date," he said, "we can expect more attacks."

Iraqi Prime Minister Iyad Allawi said in a recent statement that there had been at least 130 attacks to Iraq's infrastructure in the past seven months, costing $200 million in lost revenues.

Control of Iraq's oil production was handed over to the country's new Oil Ministry earlier this month in hopes of stemming the attacks by casting them as Iraqi-on-Iraqi violence.

"There can be no confusion: Iraq's oil revenues are Iraq's to spend. No longer will they be diverted to building palaces or to funding lavish lifestyles of a select few," Allawi said in his statement. "Every dollar made from the sale of Iraq's oil goes towards rebuilding our country. With the damage these terrorists inflict on our various infrastructures they cause harm on our good people."

Athil Mohammed, a crude-oil trader in Baghdad, said everyone hadn't accepted that message.

"There are many people who have come from outside our borders who want to sabotage the oil pipeline because they believe that the oil does not belong to the Iraqis, it belongs to the Americans," he said. "They think it will have a bad effect on the Americans."

It was unclear whether the murder of Ghazi Talabani, the supervisor of pipeline security guards at the Northern Oil Co., was meant as an attack on the oil industry or stemmed from rising ethnic tensions in Kirkuk.

Three gunmen attacked Talabani's gray Toyota Land Cruiser as he was going to work. His driver was injured.

Arabs, Kurds, Turkmens and Assyrian Christians have been at odds over how to share power in Kirkuk after the coalition hand-over June 30. The other groups have sharply criticized the Kurds' heavy-handed efforts to dominate the city since the war a year ago.

Talabani was a member of a powerful Kurdish tribe that holds political sway over a large part of the north. But Kurdish officials in Irbil said he wasn't a direct relative of Jalal Talabani, the leader of the second-largest Kurdish party, the Patriotic Union of Kurdistan.

Security in Kirkuk has worsened dramatically in the last six weeks, especially for Kurds. Five leading Kurdish officials have been killed in that period, including a senior police official, a Civil Defense Corps chief and the regional director of agriculture.

"This was an ethnic killing that had nothing to do with oil,"' said Jabar Abdullah, the head of the Patriotic Union of Kurdistan's office in Irbil, speaking of Talabani's murder. "The people doing these killings are militant, fanatic Arabs and Turkmens."

Many wealthy Kurdish businessmen and some officials now travel around Kirkuk in beat-up taxis to avoid being targeted. A hotel owner in Irbil said his Land Cruiser had been shot up five times.

It's not only Kurds who are under fire.

The U.S. air base in Kirkuk is routinely shelled, and coalition officials acknowledge that they've received reports that teams from al-Qaida and the extremist group Ansar al Islam are operating in and around the city.

The coalition's heavily fortified compound hasn't been attacked, but staffers may travel only in armored cars and must be accompanied by bodyguards when they leave the compound.

"We get out and about, but I don't walk the street," said Paul Harvey, the British diplomat who serves as the coalition's coordinator for the Kirkuk region. "I don't go shopping in the markets.

Security for the pipelines, he said, rests with the oil company and the U.S. military, which has been reinforcing its patrols and checkpoints recently.

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(Lasseter reported from Baghdad; McDonald reported from Kirkuk.)

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(c) 2004, Knight Ridder/Tribune Information Services.

GRAPHICS (from KRT Graphics, 202-383-6064): 20040616 USIRAQ exports, 20040616 Iraq oil fields

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